Global bond market sees a wave of sell-offs as Panda bond issuance reaches record highs

Recently, the long-term government bond yields of major global economies have continued to rise, increasing selling pressure in the bond markets. In contrast, China’s bond market and exchange rate have remained relatively stable, with the issuance scale of Panda Bonds reaching a record high for the corresponding period in history. Data shows that as of August 21, the cumulative issuance of Panda Bonds for 2026 has reached 209.975 billion yuan, representing a year-on-year increase of over 73%. Against the backdrop of sharp fluctuations in global bond markets, international institutions increasing their onshore RMB financing has attracted attention. According to industry insiders: “We are in a completely different economic and monetary cycle compared to overseas. Foreign capital accounts for only about 5%—8% of our bond market, giving domestic investors absolute pricing power. Coupled with our monetary policy’s emphasis on independence, external shocks cannot reverse the overall trend of the domestic bond market.” Looking ahead, industry experts believe that overseas bond yields are likely to remain highly volatile, making the value of RMB bond allocation more prominent, and there is a possibility of continued foreign capital inflows in the medium to long term. However, it should also be noted that rising U.S. Treasury yields have raised the return threshold for global allocation funds, which may somewhat affect foreign institutions’ willingness to increase their holdings of RMB bonds. Additionally, the rapid increase in yields of bonds from developed countries abroad may also constrain the valuation of domestic risk assets. (CCTV Finance)